3 comments:

The Fed is transparent in that it is subject to the oversight of Congress. Is twice a year not fast enough? The intent of Congress in shaping the Federal Reserve Act was to keep politics out of monetary policy. Legislation requires that the Federal Reserve reports annually on its activities to the Speaker of the House of Representatives.

Political independence is different from transparency. The vast majority of players in our financial markets are subject to no governmental oversight in a direct way, whatsoever. But, they have to disclose a great deal of information to the markets.

Transparency is the notion that the activities of market players should be publicly known by market participants.

The Fed is disclosing less about its transactions than a privately held mutual fund would have to disclose. This differs from most other areas of its operations, like involvement in monetary policy and interest rates where it discloses its activities in exacting detail.

SEC Chairman Cox recently noted that the fact that Fannie Mae and Freddie Mac didn't have to make the kinds of public disclosures that other publicly held firms did contributed to the financial crisis. A lack of transparency by the Fed poses a similar problem.

Congress also needs to know this information because it needs to know who does and does not have access to Fed resources already to prepare further stimulus legislation.

One can let the public know what you are up to wihtout having to take orders from politicians on a day to day basis.